A judge fines a man who kept his father's workers' comp pay

The envelope helped unravel a fraud in which the Kailua man's only child cashed more than $100,000 in retirement and disability checks intended for the father over a five-year period.

Whoever sent the envelope back -- authorities do not know who did -- helped to put a stop to the checks that Clarence Carvalho Jr. contends he was entitled to as the beneficiary.

Circuit Judge Dexter Del Rosario sentenced Carvalho Jr., 43, a longtime city employee, yesterday to five years' probation and ordered him to repay $126,346 to the city and state for the more than 140 disability and state retirement checks he cashed that were intended for his dead father.

The elder Carvalho, also a longtime city employee, died in August 1998 at age 77.

In denying Carvalho's request to defer his no-contest pleas to first- and second-degree theft, Del Rosario cited the multiple charges that he was facing, the repetitive nature of the criminal conduct and the "significant amount" of the checks involved.

Del Rosario also said he was not persuaded by the defense's argument that Carvalho had no criminal intent and that it was a mistake.

Defense attorney Al Nishimura had argued at a prior hearing that Carvalho, who worked for 20 years cleaning graffiti for the Department of Facilities Maintenance, believed he was entitled to the checks, which were made out to "Clarence Carvalho" and did not specifically note "Sr." or "Jr."

He described Carvalho as a law-abiding citizen who had little comprehension of complex financial matters -- so much so that he lost the family's Kailua home to foreclosure after his parents died.

Before Carvalho Sr. died, he basically told his only child that when he was gone, "Everything is yours," Nishimura said.

The defense contends Carvalho reported his father's death to the proper agencies, but the checks made out to a "Clarence Carvalho" continued to arrive from the city and state, Nishimura said.

As the only beneficiary of his parents, Carvalho signed the checks in his name and used his Social Security number, Nishimura said. "He took responsibility because he cashed the checks -- it's not like he went out and stole the checks," Nishimura said.

Carvalho also relied on a document he received from the state Employee Retirement System that essentially said that if his father and mother were to die, he would be entitled to nearly $80,000 -- but less the amount his father had already received before his death.

Deputy Prosecutor Paul Mow had requested that Carvalho be sentenced to prison, arguing that crimes of this magnitude deserve some jail time. Carvalho was not functionally illiterate. "Our position is he knew what he was doing because he thought he could get away with it," Mow said.

As for the letter from the ERS, it addressed only the retirement benefits Carvalho's father was to have received and not the workers' compensation checks from the city, Mow said.

When the state discovered that Carvalho Sr. had died -- some 14 checks later -- and stopped sending him checks, Carvalho did not contact the state ERS to argue that he was being denied retirement benefits as his father's designated beneficiary. But he continued to cash his father's workers' comp checks for 4 1/2 years after his father died, Mow said.

A consent form Carvalho signed clearly noted the date of injury as that of his father's and his father's Social Security number, so Carvalho must have known it was not for him, Mow said. He could have reported his father's death at that time but chose not to, Mow said in court filings.